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06 March 2024

Extension to Recovery Loan Scheme

Tom Renwick, head of business lending, Atom bank comments:

“The extension to the Recovery Loan Scheme (RLS), which will be renamed as the Growth Guarantee Scheme, is a welcome move from the Chancellor. The scheme had been due to conclude in June 2024, which meant that businesses and lenders faced a hard cliff edge. However, this extension provides lenders with greater confidence around supporting more businesses through the scheme than otherwise would have been the case. 

“While the RLS, and its predecessor the Coronavirus Business Interruption Lending Scheme (CBILS), were designed to boost support during and in the immediate aftermath of the pandemic, such initiatives have the potential to boost SME lending outside of crisis periods. 

“We have seen this already in places like the U.S. and Germany where such schemes have been deployed to great effect, and without being linked to an economic crisis. Research by Frontier Economics has suggested that evolving these schemes to provide more long-term support to SMEs would boost the level of lending to these businesses by almost 5%, which would substantially improve the position of the nation’s SMEs, stimulating job creation and economic growth. 

“Smaller businesses already face a host of challenges, holding back their potential - long term funding support could make a real difference in overcoming those hurdles and boosting the economy as a whole.”

No change to Stamp Duty Land Tax

Richard Harrison, head of mortgages, Atom bank comments:

 “It’s undeniable that Stamp Duty discourages many buyers, whether they are looking to upsize or downsize, so it’s disappointing that there have been no changes made to the regime. The increases in house prices seen in recent years have meant that buyers have faced ever growing tax bills, which only serves to tie up the market.

“The step to 10% stamp duty on transactions of above £925,000 in particular is so steep that it does stall the market at this level, discouraging downsizing and impacting other areas of the market down the chain.

“I would like to see the government look at more fundamental and enduring changes to the way stamp duty works. Previous measures have all too often been temporary at best and ultimately mean these market issues remain.”